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Merck (MRK - Free Report) is set to report its third-quarter 2026 earnings on Oct 29, before market open. The Zacks Consensus Estimate for third-quarter sales is pegged at $17.23 billion, while the same for earnings stands at $2.12 per share. Estimates for MRK’s 2026 earnings have declined from $2.77 to $2.65 per share over the past 30 days, while those for 2027 have declined from $9.61 per share to $9.26 per share.
Image Source: Zacks Investment Research
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 18.76%, on average. In the last reported quarter, the company delivered an earnings surprise of 50.0%, as seen in the chart below.
Earnings Surprise History of Merck
Image Source: Zacks Investment Research
What Does Our Model Say for MRK?
Merck has an Earnings ESP of -0.99% and a Zacks Rank #5 (Strong Sell) at present.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping MRK’s Upcoming Results
Top-line growth in the third quarter is expected to have been driven by higher sales of Merck’s blockbuster cancer drug, Keytruda and contributions from new products like Winrevair, Welireg and Capvaxive and the Animal Health segment, which may be partially offset by lower sales of Gardasil and some other vaccines.
Expected Performance of Merck’s Oncology Drugs
In oncology, Keytruda sales are likely to have been driven by rapid uptake across earlier-stage indications and continued strong momentum in metastatic indications. However, in the third quarter, the comparison is likely to have been impacted by a $250 million wholesaler purchase benefit recorded in the year-ago period. The Zacks Consensus Estimate for Keytruda’s sales is $7.46 billion.
Alliance revenues from Lynparza declined in the second quarter. It remains to be seen if sales trends improved in the third quarter. Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
Alliance revenues from partner Eisai for Lenvima are likely to have risen, driven by higher U.S. demand, partly offset by lower net pricing.
Sales of the new drug Welireg are likely to have benefited from higher demand in the United States as well as continued launch uptake in certain international markets. The Zacks Consensus Estimate for Welireg is $297.0 million.
MRK’s Vaccines, Animal Health Segment and Other Drugs
Sales of the Gardasil/Gardasil 9 franchise are likely to remain under pressure in the third quarter, with sales expected to decline year over year, hurt by weak demand in China, Japan and the United States. The Zacks Consensus Estimate for Gardasil is $1.81 billion.
Sales of some other Merck vaccines, like Rotateq, Vaxneuvance and Proquad, M-M-R II and Varivax, are also likely to have declined in the third quarter. However, sales of the new vaccine, Capvaxive, are likely to have improved sequentially, driven by demand growth and continued launch uptake in certain European markets.
Sales of the new RSV vaccine, Enflonsia, are likely to have been higher than $2 million recorded in the second quarter.
In the hospital specialty portfolio, generic competition in certain ex-U.S. markets is likely to have hurt sales of neuromuscular blockade medicine — Bridion injection. However, higher demand and pricing are expected to have benefited U.S. sales. Bridion lost patent exclusivity in the United States in July 2026. However, Merck, back in August, said that U.S. sales will decline at a slower pace than previously expected due to lower-than-anticipated generic competition. An update is expected on the third-quarter conference call. The Zacks Consensus Estimate for Bridion is $285.0 million.
Sales of the diabetes franchise (Januvia/Janumet) are expected to have been hurt by lower demand in the United States and China and generic competition in most international markets.
New pulmonary arterial hypertension drug Winrevair’s sales are likely to have gained from continued strong uptake in the United States and early launch uptake in some international markets like Japan and Europe. The Zacks Consensus Estimate for Winrevair is $650.0 million.
Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, is also likely to have boosted sales growth, backed by continued prescription demand. However, second-quarter revenues benefited from favorable timing of specialty pharmacy purchases. Unwinding of the specialty pharmacy purchases are likely to have hurt third-quarter revenues.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $15.46 billion. In the Animal Health franchise, sales of both livestock and companion animal products are likely to have increased. The Zacks Consensus Estimate for the Animal Health unit is $1.72 billion.
Nonetheless, a single quarter’s results are not important for long-term investors. Let's delve deeper to understand whether to buy, sell or hold Merck stock.
MRK’s Price Performance & Valuation
Merck’s shares have risen 33.6% so far this year compared with an increase of 17.2% for the industry.
Merck Stock Outperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, Merck is reasonably priced. Going by the price/earnings ratio, the company’s shares currently trade at 17.40 forward earnings, slightly lower than 19.03 for the industry. However, the stock is trading above its 5-year mean of 13.14. Merck stock is cheaper than some other drugmakers like Eli Lilly (LLY - Free Report) , Gilead and J&J (JNJ - Free Report) .
MRK Stock Valuation
Image Source: Zacks Investment Research
Investment Thesis on MRK’s Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by the mid-2030s.
Merck is also looking to boost post-Keytruda growth through acquisitions, adding potential blockbuster assets such as Verona Pharma's Ohtuvayre, Cidara's late-stage influenza candidate MK-1406 and Terns' CML therapy TERN-701.
Meanwhile, Merck’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging. Its new products, Winrevair, Welireg and Capvaxive, have begun to contribute significantly to top-line growth.
However, Merck is heavily reliant on Keytruda. While Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring shortly thereafter. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter the market, Keytruda’s sales are likely to decline sharply.
Sales of Merck’s second-largest product, its HPV vaccine Gardasil, have slowed down, with sales declining 9% in the first half of 2026 amid weaker demand in China, Japan and the United States. The outlook remains challenging, particularly in China, where economic weakness, elevated channel inventories and growing competition from lower-cost domestic HPV vaccines are expected to keep 2026 revenues immaterial, while changes in U.S. vaccination recommendations are also weighing on demand.
Merck faces continued revenue pressure from declining demand for its diabetes drugs Januvia/Janumet and increasing generic erosion across products such as Isentress/Isentress HD, Bridion and Dificid.
Short-Term Investors May Exit MRK Stock
Merck has one of the world’s best-selling drugs in its portfolio — Keytruda — generating billions of dollars in revenues. Merck’s new products, strong progress in its pipeline and business development and acquisitions have increased confidence that it may be able to maintain long-term growth even after Keytruda loses exclusivity. However, Merck’s several challenges, including Keytruda’s upcoming LOE cliff, persistent challenges for Gardasil, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs, cloud near-term growth prospects. Also, estimates have declined recently due to costs related to its various M&A deals.
Though Merck’s long-term growth outlook seems to be improving, its prospects for growth in the near term are limited. Short-term investors seeking immediate profits may exit this stock.
View the Zacks #1 Rank List
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Is Merck Stock a Buy, Sell or Hold Ahead of Q3 Earnings?
Key Takeaways
Merck (MRK - Free Report) is set to report its third-quarter 2026 earnings on Oct 29, before market open. The Zacks Consensus Estimate for third-quarter sales is pegged at $17.23 billion, while the same for earnings stands at $2.12 per share. Estimates for MRK’s 2026 earnings have declined from $2.77 to $2.65 per share over the past 30 days, while those for 2027 have declined from $9.61 per share to $9.26 per share.
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 18.76%, on average. In the last reported quarter, the company delivered an earnings surprise of 50.0%, as seen in the chart below.
Earnings Surprise History of Merck
What Does Our Model Say for MRK?
Merck has an Earnings ESP of -0.99% and a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping MRK’s Upcoming Results
Top-line growth in the third quarter is expected to have been driven by higher sales of Merck’s blockbuster cancer drug, Keytruda and contributions from new products like Winrevair, Welireg and Capvaxive and the Animal Health segment, which may be partially offset by lower sales of Gardasil and some other vaccines.
Expected Performance of Merck’s Oncology Drugs
In oncology, Keytruda sales are likely to have been driven by rapid uptake across earlier-stage indications and continued strong momentum in metastatic indications. However, in the third quarter, the comparison is likely to have been impacted by a $250 million wholesaler purchase benefit recorded in the year-ago period. The Zacks Consensus Estimate for Keytruda’s sales is $7.46 billion.
Alliance revenues from Lynparza declined in the second quarter. It remains to be seen if sales trends improved in the third quarter. Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
Alliance revenues from partner Eisai for Lenvima are likely to have risen, driven by higher U.S. demand, partly offset by lower net pricing.
Sales of the new drug Welireg are likely to have benefited from higher demand in the United States as well as continued launch uptake in certain international markets. The Zacks Consensus Estimate for Welireg is $297.0 million.
MRK’s Vaccines, Animal Health Segment and Other Drugs
Sales of the Gardasil/Gardasil 9 franchise are likely to remain under pressure in the third quarter, with sales expected to decline year over year, hurt by weak demand in China, Japan and the United States. The Zacks Consensus Estimate for Gardasil is $1.81 billion.
Sales of some other Merck vaccines, like Rotateq, Vaxneuvance and Proquad, M-M-R II and Varivax, are also likely to have declined in the third quarter. However, sales of the new vaccine, Capvaxive, are likely to have improved sequentially, driven by demand growth and continued launch uptake in certain European markets.
Sales of the new RSV vaccine, Enflonsia, are likely to have been higher than $2 million recorded in the second quarter.
In the hospital specialty portfolio, generic competition in certain ex-U.S. markets is likely to have hurt sales of neuromuscular blockade medicine — Bridion injection. However, higher demand and pricing are expected to have benefited U.S. sales. Bridion lost patent exclusivity in the United States in July 2026. However, Merck, back in August, said that U.S. sales will decline at a slower pace than previously expected due to lower-than-anticipated generic competition. An update is expected on the third-quarter conference call. The Zacks Consensus Estimate for Bridion is $285.0 million.
Sales of the diabetes franchise (Januvia/Janumet) are expected to have been hurt by lower demand in the United States and China and generic competition in most international markets.
New pulmonary arterial hypertension drug Winrevair’s sales are likely to have gained from continued strong uptake in the United States and early launch uptake in some international markets like Japan and Europe. The Zacks Consensus Estimate for Winrevair is $650.0 million.
Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, is also likely to have boosted sales growth, backed by continued prescription demand. However, second-quarter revenues benefited from favorable timing of specialty pharmacy purchases. Unwinding of the specialty pharmacy purchases are likely to have hurt third-quarter revenues.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $15.46 billion.
In the Animal Health franchise, sales of both livestock and companion animal products are likely to have increased. The Zacks Consensus Estimate for the Animal Health unit is $1.72 billion.
Nonetheless, a single quarter’s results are not important for long-term investors. Let's delve deeper to understand whether to buy, sell or hold Merck stock.
MRK’s Price Performance & Valuation
Merck’s shares have risen 33.6% so far this year compared with an increase of 17.2% for the industry.
Merck Stock Outperforms Industry
From a valuation standpoint, Merck is reasonably priced. Going by the price/earnings ratio, the company’s shares currently trade at 17.40 forward earnings, slightly lower than 19.03 for the industry. However, the stock is trading above its 5-year mean of 13.14. Merck stock is cheaper than some other drugmakers like Eli Lilly (LLY - Free Report) , Gilead and J&J (JNJ - Free Report) .
MRK Stock Valuation
Investment Thesis on MRK’s Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by the mid-2030s.
Merck is also looking to boost post-Keytruda growth through acquisitions, adding potential blockbuster assets such as Verona Pharma's Ohtuvayre, Cidara's late-stage influenza candidate MK-1406 and Terns' CML therapy TERN-701.
Meanwhile, Merck’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging. Its new products, Winrevair, Welireg and Capvaxive, have begun to contribute significantly to top-line growth.
However, Merck is heavily reliant on Keytruda. While Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring shortly thereafter. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter the market, Keytruda’s sales are likely to decline sharply.
Sales of Merck’s second-largest product, its HPV vaccine Gardasil, have slowed down, with sales declining 9% in the first half of 2026 amid weaker demand in China, Japan and the United States. The outlook remains challenging, particularly in China, where economic weakness, elevated channel inventories and growing competition from lower-cost domestic HPV vaccines are expected to keep 2026 revenues immaterial, while changes in U.S. vaccination recommendations are also weighing on demand.
Merck faces continued revenue pressure from declining demand for its diabetes drugs Januvia/Janumet and increasing generic erosion across products such as Isentress/Isentress HD, Bridion and Dificid.
Short-Term Investors May Exit MRK Stock
Merck has one of the world’s best-selling drugs in its portfolio — Keytruda — generating billions of dollars in revenues. Merck’s new products, strong progress in its pipeline and business development and acquisitions have increased confidence that it may be able to maintain long-term growth even after Keytruda loses exclusivity. However, Merck’s several challenges, including Keytruda’s upcoming LOE cliff, persistent challenges for Gardasil, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs, cloud near-term growth prospects. Also, estimates have declined recently due to costs related to its various M&A deals.
Though Merck’s long-term growth outlook seems to be improving, its prospects for growth in the near term are limited. Short-term investors seeking immediate profits may exit this stock.